I am not sure what the text is referencing when it says "On the same day". Does it mean that they found out the cash missing from banks on the same day when they asked experts to look at things or does it mean that they found out the missing bitcoins on the same day when they found the missing cash on the 24th february.

I believe the motivation of this sentence is to claim that they filed for bankruptcy immediately after for the first time noticing that they are insolvent. I believe many countries have laws that is illegal to continue operation like nothing happened after you have found your company insolvent. I do not know about Japan. Given this assumed motivation I would assume the sentence wants to say that the ambiguous "same day" statement referes to the finding of missing bitcoins rather than asking experts which is pretty irrelevant which day that happened. I am sure they have asked experts on multitude of days.

Yes, they should have had its insolvency reported as soon as they were aware of it. Now they are the ones that need to report that they weren't, which is very easy: Just publish the addresses of all cold wallets that belong to mtgox at each moment in time so that it is possible see exactly which balance they had at point. The same for bank accounts.

I donno which fantasy world does Karpeles thinks he live, but he has make some vague claims that he will have to back up with evidence. Not doing so means just one thing.

And no, its not that were just criminal negligent by not periodically reconciling balances... They were in fact doing it "All the time":

The worse thing is that they are still claiming it is a bug in Bitcoin instead of owning up to that fact that their software and procedures were at fault! That's leads me to believe fraud on their part.

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

That's interesting. Do you have any reference for this, even if it's just a reference to a rumour?

It makes sense now......that's why he couldn't/wouldn't give Coinbase the documents they needed......the cover would have been blown then,instead of later

"If you run into an asshole in the morning, you ran into an asshole. If you run into assholes all day long, you are the asshole." -Raylan GivensGot GOXXED ?? https://www.youtube.com/watch?v=9KiqRpPiJAU&feature=youtu.be"An ASIC being late is perfectly normal, predictable, and legal..."Hashfast & BFL slogan

So the hack took place between 1 Feb 2014 and 6 Feb 2014 (6 Feb is I believe when btc withdrawals were halted at Gox). During less than a week 850,000 were stolen.

Show me this in the blockchain

EDIT: Can someone who uses blockchain API hooked to a statistical analysis software please calculate value / amount of coins sent on the Bitcoin network in period 1 - 6 Feb 2014. I want to know what % of all bitcoins sent in this period were the ''stolen'' coins.

I'm sure there will be more detailed blockchain forensics to come, but for now here's some pretty basic info.

It makes sense now......that's why he couldn't/wouldn't give Coinbase the documents they needed......the cover would have been blown then,instead of later

Yup.... but not Coinbase.... its Coinlab....

Doh,my bad,thinking on the fly is my one true weakness

"If you run into an asshole in the morning, you ran into an asshole. If you run into assholes all day long, you are the asshole." -Raylan GivensGot GOXXED ?? https://www.youtube.com/watch?v=9KiqRpPiJAU&feature=youtu.be"An ASIC being late is perfectly normal, predictable, and legal..."Hashfast & BFL slogan

So the hack took place between 1 Feb 2014 and 6 Feb 2014 (6 Feb is I believe when btc withdrawals were halted at Gox). During less than a week 850,000 were stolen.

I read them as saying that's when they discovered the loss, but the loss itself might have happened earlier. Basically, they saw a lot of failed transactions, investigated and discovered the cause was transaction mutability and that it could have caused coin loss, investigated some more and realised they'd lost vastly more than those recent failed transactions.

And they don't know how the losses happened. Though they want to blame transaction mutability for the big losses, that's just a guess, and they seem aware it doesn't account for the loss of fiat money that has also happened. They mention "a variety of causes".

Defendants are informed and believe that in March and April, 2013 MtGox customers, at the suggestion of CoinLab, deposited $12,788,701.08 into one or more CoinLab bank accounts; CoinLab then caused the amount of such funds to be credited to such customers' MtGox accounts but CoinLab did not transfer the actual funds into the MtGox bank account. As a result, such customers' MtGox account reflected a higher amount of currency funds available to such customers than were actually in the MtGox bank account. In April, 2013, and upon the demand of MtGox, CoinLab transferred a portion of those amounts, $ 7,473,490.29, to the MtGox bank account, leaving a balance of approximately $ 5,315,210.79 to be transferred to the MtGox account and which is being wrongfully held by CoinLab.

So they they are admitting they have a big hole, and they do not say anywhere that they had to cover the hole with their own money (I would have stated that clearly in the official document, to wipe out doubt about insolvency - wouldn't have you?). The only hard cold fact they are stating is "such customers' MtGox account reflected a higher amount of currency funds available to such customers than were actually in the MtGox bank account".

The most plausible explanation to the ongoing delays, given the above and the other information available to the public, is that Gox is low on cash and running a fractional reserve.

So, IMO the big question is not "if" they knew they were short of customer's money because it is painfully obvious THEY KNEW, the big question is: WHERE DID THAT MONEY GO???

$5.5M are held by Department of Home Security (the "Dwolla situation") and $5.3M by Coinlab, that's clear. But where did the rest of the money go, as they are claming they have a hole of $22M? We need to factor in that they have made +$10M in trading fees during the last year, so in reality the missing money is at least $32M...

Crazy stuff, you really can't make this shit up... And I'd bet that the hole was caused by a a few things compounded together:

1) Bad management, eg. considering customer funds as "assets" and thus using them to cover operational expenses believing they would cover that up with fees later on (something similar to what they did by crediting customers accounts with money they did not held in reality as per the Coinlab situation). Maybe they even tried to do some arbitrage with customers money and they fucked up - what I know for sure is that incompetence should NEVER be underestimated.

2) Seizures by LE. We know for sure that DHS is holding $5M of Gox's customers money and that $5.3M are held by Coinlab. It doesn't look like there's more than that because in the leaked docs they clearly listed that money (DHS+Coinlab) as "assets", and there was no other entry for other money that could have potentially been held by other parties.

3) Outright stealing. Right now that seems more plausible to me than a few months ago. I always thought Gox was "basically honest", but after seeing their business plan it seems to me they were just a bunch of amateurs playing with third party money like it was their own - that's criminal negligence at best. They were operating an exchange but their accounting looks like the one of a bank, listing customer deposits as assets of the company, like they could use that money to cover their own expenses. That's crazy (and criminal) in my book. At this point I wouldn't be surprised they even took out dividends from the company at some point, while knowing they were running fractional and virtually bankrupt... And that's stealing.

I stubbed my big toe the other day -- I looked down to see what it was and low and behold, transaction malleability. It's everywhere!

Everyone is ragging on the poor guy but won't give him a chance to prove himself. He's been handling MTGOX for years now with no problems and now because he has a small issue everybody wants to crucify him. He looked really heartbroken at the press conference and I belive him when he says he is trying to sort it all out. I believe the bug in the system is true cause for this and that the powers that be behind the Bitcoin program are not helping any. Give Mark a break!

I stubbed my big toe the other day -- I looked down to see what it was and low and behold, transaction malleability. It's everywhere!

Everyone is ragging on the poor guy but won't give him a chance to prove himself. He's been handling MTGOX for years now with no problems and now because he has a small issue everybody wants to crucify him. He looked really heartbroken at the press conference and I belive him when he says he is trying to sort it all out. I believe the bug in the system is true cause for this and that the powers that be behind the Bitcoin program are not helping any. Give Mark a break!

Sure, the "bug" made he lose 850k coins to hackers in a few days + dozens of millions in USD. Wow, we just discovered that the US dollar is also vulnerable to transaction malleability.

Defendants are informed and believe that in March and April, 2013 MtGox customers, at the suggestion of CoinLab, deposited $12,788,701.08 into one or more CoinLab bank accounts; CoinLab then caused the amount of such funds to be credited to such customers' MtGox accounts but CoinLab did not transfer the actual funds into the MtGox bank account. As a result, such customers' MtGox account reflected a higher amount of currency funds available to such customers than were actually in the MtGox bank account. In April, 2013, and upon the demand of MtGox, CoinLab transferred a portion of those amounts, $ 7,473,490.29, to the MtGox bank account, leaving a balance of approximately $ 5,315,210.79 to be transferred to the MtGox account and which is being wrongfully held by CoinLab.

So they they are admitting they have a big hole, and they do not say anywhere that they had to cover the hole with their own money (I would have stated that clearly in the official document, to wipe out doubt about insolvency - wouldn't have you?). The only hard cold fact they are stating is "such customers' MtGox account reflected a higher amount of currency funds available to such customers than were actually in the MtGox bank account".

The most plausible explanation to the ongoing delays, given the above and the other information available to the public, is that Gox is low on cash and running a fractional reserve.

So, IMO the big question is not "if" they knew they were short of customer's money because it is painfully obvious THEY KNEW, the big question is: WHERE DID THAT MONEY GO???

$5.5M are held by Department of Home Security (the "Dwolla situation") and $5.3M by Coinlab, that's clear. But where did the rest of the money go, as they are claming they have a hole of $22M? We need to factor in that they have made +$10M in trading fees during the last year, so in reality the missing money is at least $32M...

Crazy stuff, you really can't make this shit up... And I'd bet that the hole was caused by a a few things compounded together:

1) Bad management, eg. considering customer funds as "assets" and thus using them to cover operational expenses believing they would cover that up with fees later on (something similar to what they did by crediting customers accounts with money they did not held in reality as per the Coinlab situation). Maybe they even tried to do some arbitrage with customers money and they fucked up - what I know for sure is that incompetence should NEVER be underestimated.

2) Seizures by LE. We know for sure that DHS is holding $5M of Gox's customers money and that $5.3M are held by Coinlab. It doesn't look like there's more than that because in the leaked docs they clearly listed that money (DHS+Coinlab) as "assets", and there was no other entry for other money that could have potentially been held by other parties.

3) Outright stealing. Right now that seems more plausible to me than a few months ago. I always thought Gox was "basically honest", but after seeing their business plan it seems to me they were just a bunch of amateurs playing with third party money like it was their own - that's criminal negligence at best. They were operating an exchange but their accounting looks like the one of a bank, listing customer deposits as assets of the company, like they could use that money to cover their own expenses. That's crazy (and criminal) in my book. At this point I wouldn't be surprised they even took out dividends from the company at some point, while knowing they were running fractional and virtually bankrupt... And that's stealing.